CA CPT Exam > CA CPT Questions > When supply increases, the supply curve shift...
Start Learning for Free
When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.
- a)Falls
- b)Constant
- c)Rise
- d)None
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
When supply increases, the supply curve shifts towards right. The incr...
Correct Answer :- a
Explanation : An increase in demand causes the equilibrium price to rise. On the other hand, a decrease in demand causes the equilibrium price to fall. An increase in supply causes the equilibrium price to fall, while a decrease in supply causes the equilibrium price to rise.
Most Upvoted Answer
When supply increases, the supply curve shifts towards right. The incr...
Understanding Supply and Demand Dynamics
When there is an increase in supply, the supply curve shifts to the right. This shift indicates that producers are willing to sell more goods at the same price.
Impact on Equilibrium Price
- Equilibrium Price: The equilibrium price is determined by the intersection of the supply and demand curves.
- With an increase in supply and no change in demand, the excess supply leads to a surplus in the market.
- To clear this surplus, sellers will reduce their prices, causing the equilibrium price to fall.
Impact on Equilibrium Quantity
- Equilibrium Quantity: The equilibrium quantity is the amount of goods sold at the equilibrium price.
- As the supply increases, the quantity available in the market rises.
- However, since the equilibrium price falls, the overall demand may not increase proportionately.
- Thus, the equilibrium quantity may actually increase instead of decreasing.
Conclusion
In summary, when supply increases without a change in demand:
- The equilibrium price will fall due to the surplus created by higher supply.
- The equilibrium quantity will typically increase, not decrease.
Therefore, option 'A' accurately states that the equilibrium price will fall.
Always consider the broader market dynamics when analyzing changes in supply and demand, as they can significantly influence prices and quantities in the economy.
When there is an increase in supply, the supply curve shifts to the right. This shift indicates that producers are willing to sell more goods at the same price.
Impact on Equilibrium Price
- Equilibrium Price: The equilibrium price is determined by the intersection of the supply and demand curves.
- With an increase in supply and no change in demand, the excess supply leads to a surplus in the market.
- To clear this surplus, sellers will reduce their prices, causing the equilibrium price to fall.
Impact on Equilibrium Quantity
- Equilibrium Quantity: The equilibrium quantity is the amount of goods sold at the equilibrium price.
- As the supply increases, the quantity available in the market rises.
- However, since the equilibrium price falls, the overall demand may not increase proportionately.
- Thus, the equilibrium quantity may actually increase instead of decreasing.
Conclusion
In summary, when supply increases without a change in demand:
- The equilibrium price will fall due to the surplus created by higher supply.
- The equilibrium quantity will typically increase, not decrease.
Therefore, option 'A' accurately states that the equilibrium price will fall.
Always consider the broader market dynamics when analyzing changes in supply and demand, as they can significantly influence prices and quantities in the economy.
Attention CA CPT Students!
To make sure you are not studying endlessly, EduRev has designed CA CPT study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA CPT.
|
Explore Courses for CA CPT exam
|
|
Similar CA CPT Doubts
Top Courses for CA CPTView all
When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer?
Question Description
When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer?.
When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer?.
Solutions for When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA CPT.
Download more important topics, notes, lectures and mock test series for CA CPT Exam by signing up for free.
Here you can find the meaning of When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice When supply increases, the supply curve shifts towards right. The increase in supply denotes a shift in the supply curve to the right. If there is an increase in supply without change in demand equilibrium price will _____ and the equilibrium quantity will decrease.a)Fallsb)Constantc)Rised)NoneCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice CA CPT tests.
|
|
Explore Courses for CA CPT exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup